Nyanza Light Metals (Nyanza), established in 2011 as a project aimed at processing ilmenite and titanium slags, is constructing an 80 000 tonnes per annum rutile titanium dioxide (TiO2) pigment and chemicals manufacturing plant in the Richards Bay’s Industrial Development Zone (RBIDZ). Donovan Chimhandamba, CEO of Nyanza Light Metals and Thabane W. Zulu, CEO of the RBIDZ, share some insights about this exciting project and the opportunities it brings.
Donovan Chimhandamba, CEO of Nyanza Light Metals
Having spent over 13 years on feasibility studies and developing the project from concept, what would you say are the key takeaways on how to best position Nyanza Light Metals to successfully enter the global titanium value chain and become a key player in this sector?
Nyanza has been positioned to take advantage of the changed global manufacturing cost structures and address market gaps existing producers currently underserve. With Covid and the Ukraine-Russia war, we have seen massive de-industrialisation in some of Europe’s previously strong manufacturing regions. Because of this, the markets that used to be serviced by production from these regions will be looking to replace supply from a Nyanza. Africa is an important market for Nyanza, and Nyanza is well-placed to serve this market and benefit from the continental free trade agreements.
Having completed phase one of the project – the Product Testing and Development Centre – tell us a bit about the plans for phase 2.
The Product Testing and Development Centre (PTDC) is for market development work ahead of commercial production. The plant can produce sufficient product samples for customers to test performance at an industrial scale. This has enabled Nyanza to conclude offtake agreements that the funders need for phase 2 construction. The capacity of the PTDC at peak can be 840tpa (tonnes per annum).
Phase 2 involves the construction of the main production facility with a production capacity of 80 000tpa. The Nyanza plant will be the most modern plant in the world, with superior operating efficiencies regarding energy and raw material consumption rates. Our energy supply will draw from a mix of renewables and waste steam-fired co-generation power.
Phase 2 will cost R15 billion and will take 36 months to complete. Phase 2 commences in May 2024 with the RBIDZ starting the site preparation works, including deforestation, site clearing and levelling. During the construction period, there will be more than 3 000 jobs and opportunities for SMME’s to participate in supplying services and materials to the main contractor.
What are the benefits of setting up a titanium dioxide pigment manufacturing plant within an Industrial Development Zone?
We set up Nyanza in the industrial development zone for many reasons. Some benefits include tax incentives, support from the South African government with feasibility funding, 85% of our production is for export, and the zones have ready world-class infrastructure critical for operating such an industrial and chemical plant.
Since 2016, there has been no production capacity for titanium dioxide pigment in Africa. Nyanza will be the only plant in Africa and will be technologically advanced.
What is the expected economic impact of this plant once fully operational?
The projects have a high economic and social development impact, including:
§ Creating 3 000 construction jobs for 3 years.
§ Creating 850 direct permanent jobs once construction is complete.
§ Stimulating the local SMME supply chain and economy.
§ Generating more than $300m in export revenues.
§ Creating mineral beneficiation and value-addition industries.
It’s often been said that Africa as a continent loses a lot from an economic perspective as it frequently lacks beneficiation processes. Share your thoughts about this.
Africa has been primarily a raw material producer on many fronts. Titanium dioxide pigment is just one example of a raw material in Africa, which holds about 45% of the world’s reserves but has no value-addition capacity on the continent. The most significant barriers to setting up these plants have been capital, access to baseline infrastructure, and technical resources. Nyanza has brought in the continent’s leading development finance institutions and an EPC contractor with the most experience in the world in building such plants. This has significantly de-risked the project, and having it positioned in the RBIDZ, most of the baseline infrastructure requirements are available.
What are key learnings in starting a beneficiation plant, and how can this translate to other industries?
One of the biggest challenges is raising project preparation and feasibility funding. There aren’t enough funders willing to take such early-stage risk. So many projects fail to take off because they did not manage to complete bankable feasibility studies. Nyanza has spent over $25 million (R470m) on project development. If Africa is to develop more projects of the size of Nyanza, more project preparation funding is required from the financial markets.
Thabane W. Zulu, CEO of the RBIDZ
Considering the progress of Nyanza Light Metals, what are some key takeaways for RBIDZ concerning unlocking industry opportunities?
As the RBIDZ, we are pleased to witness a project such as Nyanza progressing in our estate. This legacy project will transform the Richards Bay area and KwaZulu–Natal province into the Titanium Capital. It will also contribute significantly to the socio-economic landscape of the province while positively impacting the lives of our communities and business value chains. Moreover, the agglomeration of key industries that are operational in the area makes it easy for the industries and investors to thrive.
For example, it is easy for incoming investors to create business linkages for product off–take or leverage existing customers or stakeholders, both local and international.
There is a strong business case linking the potential export activity of the RBIDZ investor to the capacity of the Port of Richards Bay. The link to a port is a key defining characteristic of the Zone, as the intention is primarily to attract foreign export-oriented companies that will be transferring skills and innovative technology to the local economy through their interaction with domestic firms down the value chain.
The availability of feedstock/minerals such as aluminium, heavy metals, various chemicals, wood, pulp, paper, agricultural products, and coal offers numerous downstream manufacturing possibilities and almost unlimited opportunities for investors.
We are executing our mandate as delegated.
Share your thoughts on how projects like these help create jobs and impact communities.
Job creation to alleviate unemployment is one of the benefits of development in the area; however, exchange of knowledge and skills transfer are other vital components that leave a long-lasting impact as the communities can utilise such skills beyond the specific project.
Regarding the Nyanza, project, we are delighted to highlight that during the construction of Phase 1, which is the Product Testing and Development Centre, 286 people were employed during construction, and to date, 40 operational jobs have been created.
The rollout of Phase 2, which is the construction of the leading commercial plant, will create even more jobs and a kaleidoscope of the value chain of opportunities for emerging enterprises within and beyond the geographical location of this project.
Overall, RBIDZ targets operationalising R R757 million investment projects in the 2024/25 fiscal year, while R8 billion projects are targeted to commence construction.
In accelerating and unlocking innovation/industrialisation initiatives, what more is needed from a legislative, investment, resource and skills perspective?
- Development of adequate infrastructure: transportation, energy, telecommunications and logistics are vital for businesses to operate efficiently.
- Provision of investment incentives:
- implementing accessible and business-friendly regulations with reduced red tape.
- streamlining licensing processes and regulatory procedures.
- Advancing collaborations between the government and private sector to
unlock opportunities and create business linkages.
- Driving skills exchange and transfer programmes to advance knowledge and innovation.
